United States aims to cut Iran’s crude exports to under 1 million bpd from May

Vastavam web: The United States aims to cut Iran’s crude exports by about 20 percent to below 1 million barrels per day (bpd) from May by requiring importing countries to reduce purchases to avoid U.S. sanctions, two sources familiar with the matter told. U.S. President Donald Trump eventually aims to halt Iranian oil exports and thereby choke off Tehran’s main source of revenue. Washington is pressuring Iran to curtail its nuclear programme and stop backing militant proxies across the Middle East.

“The goal right now is to reduce Iranian oil exports to under 1 million barrels per day,” one of the sources said, adding the Trump administration was concerned that pressing for a complete shutdown of Iran’s oil in the short-term would trigger a global oil price spike. Washington may also deny waivers to some countries that have not bought Iranian crude recently, the sources said. The U.S. reimposed sanctions in November after pulling out of a 2015 nuclear accord between Iran and six world powers. Those sanctions have already halved Iranian oil exports.

“Zeroing out could prove difficult” one of the sources said, adding a price of around $65 a barrel for international benchmark Brent crude was “the high end of Trump’s crude price comfort zone.” Brent crude settled at $67.55 a barrel on Wednesday. Both sources said they were briefed by the Trump administration on the matter but were not authorized to speak publicly about it and asked for anonymity.

Brian Hook, the State Department’s special representative on Iran, also said in remarks at an industry conference in Houston on Wednesday that Washington is pursuing its plan to bring Iranian crude exports to zero. Trump “has made it very clear that we need to have a campaign of maximum economic pressure” on Iran, Hook said, “but he also doesn’t want to shock oil markets.” “On the numbers part, we’ll get an updated assessment as we get closer to the end of the 180 day period,” of the first round of waivers that ends in May, the spokesperson said.